First iPhone, now Google’s Nexus One — you can’t get either one to work on Verizon.
My theory explaining why the iPhone works only with AT&T is pretty simple: Steve Jobs eliminates SKUs whenever he can. (That’s why I was so surprised when Jobs revealed six different iPad SKUs.) Look at Apple’s entire product lineup: two basic iMacs to configure, exactly one Mac Pro model to upgrade, etc. Sure, there are five different Mac laptops available, but only three screens between them. And while I’m thankful Apple hasn’t stopped making iPod Classics, I’d wager they’re only a year or two from extinction. Once Apple can sell Touch models with 128GB for $250, the Classic will go bye-bye. Because Steve hates SKUs.
iPhones? You have three to choose from, one of which is a discounted model from last year. The other two are differentiated only by how much memory they have on board. And that’s it. It’s not quite “any color you like so long as it’s black,” but close. Last I heard, Apple made an iPhone with a white back, but I’ve never seen one loose in the wild. And to get the iPhone on Verizon would mean a completely new model, because the cellular chipsets behind Verizon’s and AT&T’s networks aren’t at all compatible. Jobs would rather sell fewer phones with fatter margins. Steve hates SKUs.
Take a look at Apple’s power adapters, and all of them, regardless of size, use the exact same slip-on wall plug. Why? So that Jobs needs to make only one set of international adapters, to power everything from iPads to 17″ MacBook Pros. Steve hates SKUs.
There’s a method to Apple’s madness. That wall plug is the nicest one I’ve ever seen, and I’m sure Apple spent more money designing that one tiny part than Dell had in its entire R&D budget for 1997. (I exaggerate, but not by much.) But the longer view is, Apple designed that plug once, years ago, and may never have to update it. And their international adapter kit hasn’t changed in the half decade since I got mine — maybe longer. Amortized costs: Damn near nothin’.
Steve hates SKUs, and passes the savings along to… OK, he just stuffs the savings under Apple’s 42 billion-dollar mattress. Not only does Apple make incredible profits, it does so selling remarkably few products. Steve hates SKUs, but he loves money.
But Google produces exactly –one– physical product for consumers. And a great way to differentiate the Nexus One from the iPhone would be to let Verizon sell it. Everybody loves Verizon, and nobody is fond of AT&T.
So what’s the deal? Well, Nexus One has been a total flop. Google, it must be said, just isn’t a consumer-electronics company. On the other hand, Google’s Android mobile OS has been a huge hit. This morning, AdMob’s tracking revealed that Android users on the web overtook iPhone users for the first time last month.
Best guess: Google isn’t going on Verizon because Google’s getting out of the handheld business, and Verizon doesn’t want to be left holding the bag — a bag full of unsold inventory. Nexus One was an experiment, and not a very happy one. But it looks more and more like Android is becoming the Windows 95 of the Twenty-Tens. And as one of the guys who lined up to buy Win95 at midnight 15 years ago, I see that as a good thing. But if Google becomes the next Microsoft, then maybe that’s not such a good thing.
Meanwhile, I suspect Steve Jobs will continue to eliminate SKUs and generate profits.
The other thing is, that while Verizon has “the nation’s best 3G coverage” (by area), it’s comparatively slow (if not radically). AT+T’s is faster when it’s there, but Verizon’s is more likely to be there… for now.
GSM is also more compatible worldwide (at least that’s my impression and a little research seems to agree) and uses less power than CDMA… which helps with battery life and international sales with the single SKU. If you have to pick one to sell “everywhere”, you don’t pick CDMA, and thus you don’t work on Verizon or Sprint.
I remember when ’95 came out. I had done a lot of research trying to decide between that & OS/2, which was far better than ’95, but lacked the support and compatibility ’95 had for my apps. The clincher was when Jerry Pournelle remarked that (for at least one convention) IBM was charging a hefty fee for their SDK while MicroSoft was literally giving it away.
So I ended up getting the technically lesser product because it was a better solution for me. For everyone else at it turned out.
My question, Stephen, is did you install ’95 from floppy? When I did the upgrade, I went from 4Mb RAM to 8 on a 486dx2-66, and finally bought a CD-ROM. I got the Soundblaster-16, two cheapo speakers, and a blazing 2x drive from a Creative Labs package. No way was I gonna upgrade off of 22 floppies!
As a post-script I will mention up until then I was still running DesqView with MS-DOS 5.0, since Win3.x didn’t do pre-emptive, interrupt-driven multitasking. They finally dragged me into Windows-World.
Sigivald. You’ve basically got it right. Verizon’s CDMA network wouldn’t be able to handle the iPhone. It simply doesn’t have the bandwidth. And as far as multi-tasking goes, the only real way to get multi-tasking (as in making a call and surfing the web at the same time) on a CDMA phone is with two chips. One chip would whimper once and curl up into a puff of smoke.
Jobs chose GSM because it’s a better technology wrt handling the bandwidth the iPhone was projected to use. Period. And it’s universally used. We’re pretty much the only country in the world that still uses CDMA. Everyone else is GSM.
And 4G? GSM 3G 2.0. It is almost literally the next version of GSM technology. My wife’s cousin has worked with this stuff for years at Motorola (has a few patents to his name around the black boxes that drive the cell towers), and is pretty keen on 4G. It’s quite scalable, and the roll-out should be pretty painless. The scalability lends itself very well to cheap start-up infrastructure in poorer countries. And upgrading it will be almost entirely software related, which really blows my mind.
So, SKUs are a pretty theory, Steve. But not in this case. Frankly, if Verizon could demonstrate that their network could handle the iPhone, I’m sure Apple would have done a deal with them by now. But it’s not going to happen until 4G rolls out.
Interesting, Nukem. I thought by now that just about everyone (including here in the US) was GSM.
Oh, it’ll happen — just as soon as the porn industry takes an interest in cellphone technology. After all, they’re the ones who made VHS the winner over Beta.
I don’t understand your rants against Jobs and his profit-making mind. That’s exactly what a company is supposed to do: benefits, and Apples strategy seems effective now, yes, it’s the same wall plug, so what? successful things don’t need to be changed, how many years humanity is drinking Coca Cola?
Of course, you can argue maybe Apple’s strategy will fail in the long long term, but let’s the market (i.e. people, consumers) decide that by itself. In the meantime, let’s celebrate all the profit-making minds who make America a great country.
I’m not sure how you can see this as a rant against Apple or jobs. Where is Steve condemning Steve? It’s just an essay based on the observation that Jobs prefers fewer product offerings with greater margins, hence creating products designed to work with Verizon is out.
And as a Verizon customer who wants an iPhone, that makes me sad.
Have you looked at the Driod? I have had an iphone and after having enough of AT&T switched to Verizon. The Driod beats the iphone hands down.(my opinion)I can do alot more with the Driod than I ever could with the iphone.
Heh. Show of hands: How many here are old enough to remember “New Coke”..?
Oooh, pick me, pick meee!
Oh, hell yeah. I couldn’t believe Coke actually wanted to taste more like Pepsi. One of the saddest periods of my life.
Then they released Classic, and the Good Ship Sodapop righted itself and all has been well since. Well, except for that whole democracy allows the corrupt rise to the top thing.
But other than that? Righteous.
X –
As the happy owner of many fine Apple products, I can only hope they keep making silly amounts of money.
Google is not in the handheld business. Nexus One is an HTC phone and Google is just selling the phone online. Instead of calling the phone T-mobile Nexus One, it’s called Google Nexus One because you can only buy the phone from Google.
Verizon will continue to stay a prisoner in The Cave (thanks Wilkow) unable to move and able to see only dim shadows on the wall. They refuse to listen to former ‘prisoners’ who have seen the Sun and the wonders of nature.
Verizon does not know how to deal with UNIX based Apple products from the Macintosh to the iPad to the iPhone and now the iTablet. Seems Verizon has bitten and swallowed the Microsoft ‘apple’, their support systems are all tailored for Windows (ever try to get support for Apple products from any of Verizon’s Call Centers?).
Is there any wonder why Verizon’s competitors are eating them for breakfast?
I used to have AT&T provide by cell phone service here in Colorado Springs. Nothing fancy, just basic cell phone service. It sucked eggs with poor audio quality, poor coverage and a high percentage of dropped calls. This was just a couple years ago. There’s no way I’ll ever go back to AT&T, so there’s no way I’ll buy an iPhone unless it becomes available on another network.
Larry –
Strange. Up here in Monument, and in the north end of the Springs, I never have any problems. And 3G speeds are generally good. Meanwhile, my in-laws, who live just a few minutes away, can barely use their Verizon phones at home.
There may be another issue: at a previous employer, I was closely involved with shipping a cell phone application on Verizon. The obstacles we encountered, legal and otherwise, were appalling. It may well be that Google and Apple ran into these problems and simply decided they weren’t worth the effort.
I’m having a love-hate relationship with Apple these days. I’m eagerly awaiting my new 3G 64GB iPad. But upon ordering my iPad mid-month, my PowerMac desktop just went on the fritz and I’m now looking around for another solution. I’m sure Steve is behind it, and to complicate matters, Apple no longer manufactures the parts which I’d need to repair the PowerMac!!! Steve is just being the anti-Bill Gates — but in doing so, he sometimes ends up being exactly like Bill Gates and shoving stuff down our throats we never asked for.
I have one of their (Apple’s) 30 inch Cinema Displays — and while a $1000 PC laptop can now run the thing (the graphics cards are so powerful these days…) for a mere $1000 more I can get a PowerBook or MacAir, and enjoy their incredible form-factor PLUS run the 30 incher to boot. That’s why I hate and love Apple. Their design and functionality is so superior to their competitors, but they rape you on cost.
Still — with Apple I’ve got toys and gizmos that are commensurate with my childhood fantasies about what living in the 21st century would be like — I can’t say that’s true with most of the others in the constellation of electronics and computer manufacturers.
Wait. You’ve got a PowerMac that, until recently, has been working fine for you. Now it has finally given up the ghost. After how many years? I’m betting at least four. And you’re pissed off that you can’t get it repaired and that you’re going to get “raped” because you need to buy a new one?
First, the after-market for parts for Apple computers is vibrant. I’ll bet you anything you’ll be able to find the part and either fix it yourself or find someone who’ll do it fairly cheaply. So, if you really need this computer to stand back up and work, you’ve got options. Don’t piss on Apple for that one.
Second. ROI anyone? You aren’t being raped on cost at all. You’ve more than gotten your money back on the PM. And the notebooks that Apple is selling now are crazy cost-effective. I’ve got an almost four yo Macbook Pro that I’m working on right now. Frankly, I need a new one, as the development work I’m doing on it is straining the gerbils inside. I need to give them uppers when I want to work late. But it’s still a phenomenal machine, and will be handed down to my son as soon as I get my new 17″ MB Pro. I’ll bet it’s got at least 2-3 more productive years in it, especially as a homework machine. And as my son gets into programming, if that really floats his boat, it’ll hold the fort down for a while.
So I think your words ring hollow. Yeah, it’s easy to complain about how expensive Apple products are. But reality shows otherwise. Welcome to the 21st century.
Nukem, perhaps he expects a longer lifetime from an Apple product considering he paid a premium for it?
Myself, I would expect an Acura (say) to last longer than an Escort. I’m just sayin’.
Simplicity has been a hallmark of S Jobs forever. One button mouse, no Flash, 3 clicks to any song on the original iPod, hiding the file system on the iPhone/iPad and of course, honing down Apple’s product lineup to the best, most profitable devices and services. Apple is a $50 billion company now and still has, what, less than 30 products. It is a lesson other companies would do well to learn. More choice is not necessarily a better thing for consumers. Most people actually just get confused when you have more than 3 or 4 basic choices in a product.
As for Verizon, Apple actually approached them first, before AT&T. A year ago I didn’t think Apple would go with Verizon until they rolled out 4g with ATT but that’s going to be a while so I wouldn’t be surprised if they brought out a CDMA version of the iPhone after all, especially if they could also sell that same model to the one Chinese carrier which also uses a variation of CDMA. (not sure that is technically feasible.)
Simplicity has been a hallmark of S Jobs forever. One button mouse, no Flash, 3 clicks to any song on the original iPod, hiding the file system on the iPhone/iPad and of course, honing down Apple’s product lineup to the best, most profitable devices and services.
The philosophy is and has been that people in general are too stupid to chew and walk at the same time. Works great for simple stuff. Sucks for computers. Apple never commanded any sort of major market share in PC’s for this reason. Apple’s resurgence is due more to Jobs implementing his philosophy to product types where it has relevance.
In a previous era Jobs would have made spiffy looking toasters and Gates would have been busy creating industrial looms and combines. Jobs couldn’t design an industrial machine anyone would buy and a Gates toaster would have had 48 settings, 31 levers, and 12 different heat coils available via mail order.
Um, Alson, Jobs was the reason Apple migrated to FreeBSD-based OS X, and Apple’s wisdom in not diluting a good-quality OS the way MicroSoft did with NT. Gotta give the man three thumbs-up for that choice.
The main reason Apple doesn’t have a bigger market share goes back to Stephen’s original post. Jobs loves him some fat profits. He would rather keep OS X on native Apple hardware, because that makes the company more money than if they allowed third parties to build white-box Apples. That would kill the company’s profits. Bigger market share, better for the world as a whole, but not so good for Apple.
Could Apple still offer premium services such as AppleCare or the Genius Bar if their market share tripled, while their revenue remained relatively the same, or only somewhat greater?
“Steve hates SKUs, but he loves money.” Jobs is worth a few billion from Apple, another few billion from Pixar, but he doesn’t seem to have that classic love of money. He’s always been about changing the world. The money is just a validation of his vision.
As to those SKUs, Apple has proven that sometimes less is more. Anyone who’s ever tried to pick the “right” phone from the scores of models offered by Apple’s competitors appreciates the simplicity of offering just one best in class phone line with limited differentiation in models that people can understand.
Ray? Um, Ray, there’s something on the end of your nose…